Swiss government has emergency plan to stabilise exchange rate

ZURICH (Reuters) - The Swiss government has a confidential emergency plan to stabilise the Swiss franc exchange rate in case the euro zone crisis worsens and the Swiss National Bank alone is no longer able to guarantee the rate, Swiss parliament's finance delegation said in a report.

The SNB capped the soaring Swiss franc at 1.20 francs per euro in September 2011 to fend off deflation and a recession and has repeated ever since that it was ready to buy foreign currency in unlimited quantity for this purpose.

"The finance minister explained that the government has drawn up measures to be taken in case monetary policy alone should not be able to stabilise the Swiss franc exchange rate," the delegation said in its annual report published on Friday.

The government laid out these measures to the delegation, which supervises Switzerland's financial budget, in a confidential report in August 2012, the delegation said without giving further details about these measures.

A finance ministry spokesman was not immediately able to comment on the report.

Safe-haven inflows pushed the franc almost to parity with the euro in summer 2011, hurting the country's export-oriented economy by making Swiss products more expensive abroad. The SNB's cap has stabilised the exchange rate at the expense of bloating the central bank's foreign currency reserves.